In 2010, the Dodd-Frank Wall Street Reform Act mandated that the Fed undergo a one-time audit of loans it made to companies like AIG during the 2008 Financial Crisis. The Act also allowed the additional audits of any future emergency loans the Fed might make. Federal Reserve Chairman Ben Bernanke complied, but wasn't happy about the audit. Bernanke said audits made it seem like the Fed was no longer independent. Worse than that, he added, it hampered the Fed's ability to quickly and creatively spur an economy that is still teetered on recession.
Many of the Fed's other activities are audited on a regular basis.
- The Government Accountability Office (GAO) reviews various Fed bank activities. For details, see GAO Audits.
- the Office of Inspector General (OIG) oversees an annual audit of the Fed's financial statements. The Fed's balance sheet is published online weekly. For details, see Fed's Balance Sheet.
- All Reserve banks are audited by the GAO and the OIG.
- Last but not least, the Fed's financial statements, including the combined financial statements for all Reserve Banks, are published in the Annual Report. (Source: Federal Reserve, Does the Fed Get Audited?)
Careful what you wish for
- The 2008 pullout was all about flexibility. Regulate the Fed and you are looking for a hard crash landing - sort of like the passengers in mutiny debating with the pilot as he tries to land a damaged plane. There is a time and place for everything. This is not the time and place.
- —Guest AC
What Do I Think??
- You bet they should be audited. When an organization operates in complete secrecy, one has to wonder what goes on behind closed doors. I argue if there is any oversight on The Fed, you can bet they're cooking the numbers. The real hero here is Ron Paul, who has worked tirelessly to bring much-needed transparency & accountability to the secretive bank with his HR1207. He stated: "The Federal Reserve is the chief culprit behind the economic crisis. Its unchecked power to create endless amounts of money out of thin air brought us the boom and bust cycle, and causes one financial bubble after another. Since the Fed’s creation in 1913, the dollar has LOST MORE THAN 96% OF ITS VALUE. By recklessly inflating the money supply the Fed continues to distort interest rates and intentionally erodes the value of the dollar. The American people deserve no less than a full and complete audit. Fed Chairman Ben Bernanke opposes the bill, and argued last week that the Fed should operate in secrecy."
- —Guest Collette Desmarais
- They are obviously buying back the bonds with "Monopoly "money. Why not use the fake money to pay other national debt.
- —Guest brad
- Overall, these guys do a very good job. They are not perfect, but no one is. I am glad that they were available to pull us out of the last economic mess. We will definitely need them around for the next crisis.
- —Guest Priest
i aint afraid
- Theres so many secrtets gettin exposed, n we the citezens cant wait to have an oppinion about it, conspiracy maybe, the hunted will become the haunted, just give it more currage, we r at the last days, this aint no communist, its just a simple freedom of speech, an i aint no terrorist
- —Guest elgallito fino
Should the Fed be audited?
- Not if it takes away the independence of the Fed. The Fed must remain independent. The Fed is not the problem. The problem is that our elected officials cannot constrain spending or act in a fiscally responsible manner. This really means that we, the people, are the problem because we allow our elected officials to act irresponsibly. The Fed cannot print money. (It can, however, create money through its policies.) Quit blaming the Fed and look in the mirror for the problem.
- US government is acting as seller and buyer at the same time. Fed needs to be completely independent of government, otherwise the system deteriorates.
- —Guest REG
- The fact that this question is even asked is quite amusing. The american financial system is like a hall of mirrors, and the Fed is that big one at the end that makes everything else look like its upside-down. Of course no one will ever audit the Fed, the whole point of the Fed is that it is hidden, so as much tinkering and tweaking as possible can happen, and no-one can ever say anything about it at all. Myths, mysteries, conspiracies and scandals, all are blamed on the Fed, so it is very important that it remains hidden. Did we narrowly avert a financial collapse this week? or was that narrowly averting a collapse in the whole reality that is America? But don't worry USA, the world wont ask to look under your kilt, we are quite happy to keep laughing at this amazing scam you have invented, and look forward to what else you can do in this new time of peace.
- —Guest John
Ignorance abounds...even here.
- Get a grip people. If what the fed is doing is so bad, why don't the people see it now ? The dollar is still the world's reserve and will remain so. We already know that 300 million Americans think and being typically stupid...that the fed is actually printing up money. How does one educate such blissful ignorance ?
- —Guest Astonished
- The Federal Reserve system is a huge scam conceived by Central Banksters in order to fool the public into believing the Feds are "on our side". The Fed is a private banking cartel that has slowly bled the U.S. Treasury and transferred the bulk of our assets into fewer and fewer hands. the Fed causes recessions, depressions, inflation and all other economic conditions in order to benefit the elite and screw the rest of us. The dollar is collapsing at the behest of the Fed and their puppet masters, the Central Banksters. The Central Banks control the U.S. and world economic systems, control high ranking (s)elected officials of both parties. A very large percent of the income taxes we pay goes to pay the interest on the national debt to...you guessed it...the Central Banks, all orchestrated by their whores on the Federal Reserve Board and U.S. Government "Officials".
- —Guest Carol Knapp
Absolutely Audit the Fed
- The Fed should be audited like any other untrustworthy entity operated by humans who are capable of putting their own interests and the interests of their political coterie above that of the public whom they are supposed to serve.
- —Guest Fearless
- Yes. If people knew what the fed's actions were doing to their money they would be outraged.
- —Guest norm dillinger
- The Fed buys bonds and other assets with reserves. But she has the idea that this increases bank loans. QE effects the price of loans but banks do not lend reserves. Reserves do not constrain or improve lending to non-banks. Banks cannot withdraw excess reserves. They can lend them to other banks, use them to buy cash from treasury, use them to clear checks and other transactions, support ATM operations.or use them to buy government debt. (Note from Kimberly -- "Thanks for your insight. I have since clarified my articles.")
- —Guest John Wilkins
- no. its a private co. and therefore, not subject to audit. who owns the fed res. since it is private?
- —Guest steve
Flat Tax Isn't Fair
- Because flat tax plans ignore capiatl gains and anything that is not wages, salaries, and pensions. How fair is that? It isn't. When we advocate raising taxes on the top 2%, they complain about the 47% of Americans who don't pay taxes. Sigh. They pay lots of taxes: Social Security, sales tax, property tax, etc.; they just don't pay any income tax. They often pay a higher percentage of their income in Social Security taxes than the marginal rate of the wealthy (15.3% vs 15%). The top 20% control 84% of the wealth. The bottom 40% control 0.3% of the wealth and the government wants them to pay income taxes on what little money they earn? Yeah right!
- —Guest JRXUyEbMY